TARGET MARKETING CIGARETTE MARKET MOVED FROM A MASS MARKET WITH FEW BRANDS TO A HIGHLY SEGMENTED MARKET (165+ BRANDS).
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1 I. BACKGROUND CIGARETTE MARKET MOVED FROM A MASS MARKET WITH FEW BRANDS TO A HIGHLY SEGMENTED MARKET (165+ BRANDS). WE RESPONDED CORRECTLY WITH HIGHLY REGIONALIZED AND TARGETED MARKETING STRATEGIES : - PRIORITY AREAS - YAS PROGRAMS - BLACK/HISPANIC PLANS - REGIONALIZED WORK PLANS (34 PAGES) - REGIONALIZED FIELD MARKETING (SALEM, CAMEL, ETC.)
2 I. BACKGROUND WE ARE SUFFERING FROM STRATEGIC BRILLIANCE AND TACTICAL FAILURE : A. SALES I B. FIELD MARKETING C. SEGMENT MARKETING
3 I. BACKGROUND A. ALES 1. WORKPLAN : SALES IS VOLUME DRIVEN -> FOCUS ON CARTONS. MARKETING IS BUSINESS-BUILDING DRIVEN -> FOCUS ON PACKS. EXAMPLES MAGNA EXECUTED LIKE DORAL. Low PACK OUTLET COVERAGE/FREQUENCY. VOLUME BRANDS EMPHASIZED IN PACK OUTLETS. WORKPLAN TOO COMPLEX TO BE EXECUTED. ONE REPRESENTATIVE HAS 1-5 WORKPLANS.
4 I. BACKGROUND A. SALES 2. OTHER OPPORTUNITIES : NO FLEXIBILITY OR RESPONSIVENESS IN LEVERAGING REGIONAL OPPORTUNITIES. MARKETING IS TOO FAR FROM WHERE IT IS HAPPENING : "By THE TIME SOMEONE RESPONDS, IT'S TOO LATE, SO I'VE STOPPED ASKING." 0 PROGRAMS CANNOT BE CUSTOMIZED.
5 I. BACKGROUND B. FIELD MARKETING ISSUE : TO REACH YAS SMOKERS WE MUST RELY ON FIELD MARKETING. HOME OFFICE MANAGEMENT OF FIELD MARKETING WITH EXECUTION BY SUPPLIERS RESULTS IN : - LOCAL OPPORTUNITIES MISSED : CANNOT BE IDENTIFIED IN ADVANCE - WEAK EXECUTION : NOT LOYAL TO RJR/LITTLE MONITORING - DO NOT LEVERAGE SALES SUPPORT : NO RELATIONSHIP/DO NOT TRUST
6 I. BACKGROUND C. SEGMENT MARKETING SEGMENT MARKETING CANNOT BE ACCOMPLISHED WITHOUT MARKETING/SALES FOCUS : - BLACK/HISPANIC - YAS PROGRAMS - SAVINGS SEGMENT
7 II. KEY ISSUE WE ARE STRATEGICALLY SOUND. TACTICALLY WEAK. SUPERIOR EXECUTION WILL PROVIDE THE COMPETITIVE ADVANTAGE OF THE FUTURE. "THE STRUGGLE FOR STRATEGIC DIFFERENTIATION IS PRODUCING LESS AND LESS COMPETITIVE ADVANTAGE. BETTER MANAGING EXECUTION AND SEEKING IMAGINATIVE TACTICS... CAN MAKE ALL THE DIFFERENCE." THOMAS V. B0N0MA HARVARD PROFESSOR/AUTHOR OF MARKETING EDGE : MAKING STRATEGIES WORK
8 III. RECONMENDATION STRUCTURE WORKPLAN, SALES FORCE AND MARKETING STAFF AROUND KEY STRATEGIC OBJECTIVES : SALES FIELD STRATEGIC MARKET WORKPLAN FORCE MARKETING 1. BLACK S S 7 2. HISPANIC S S 6 3. MILITARY S S 5 4. YAS/BuSINESS BUILDING S* GM 6 5. VOLUME S** GM 6 * PACK ** CARTON
9 III. RECONMENDATION DECENTRALIZE MARKETING TO CREATE A STRUCTURE THAT FACILITATES SUPERIOR EXECUTION OF REGIONAL AND TARGETED STRATEGIES.
10 IV. IMPLICATIONS POTENTIAL INCREASED HEADCOUNT OF SALES FORCE (PROBABLY NOT MORE MONEY). DECENTRALIZED MARKETING - BLACK MARKETING REPS > BLACK BRAND MANAGER - HISPANIC MARKETING REPS > HISPANIC BRAND MANAGER - MILITARY MARKETING REPS > MILITARY BRAND MANAGER - YAS MARKETING REPS > VP YAS BRANDS - VOLUME MARKETING REPS > VP VOLUME BRANDS
11 IV. IMPLICATIONS MARKETING STAFF COSTS COULD INCREASE : - FIELD STAFF COSTS $3.7MM $125M) - REDUCED INTERNAL STAFF 1 MANAGER/1-2 ASSISTANTS
ST OR E Global Supplier Transport by Sea, Air road Retail Store/ Customer Distribution Center/ Warehouse Manufacturer/ Supplier Central Warehouse Receiving Quality Management Process Decision to stone
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